‘Killing machine’ Amazon in ombudsman's sight

Retail giant Amazon has been issued a reminder about the need to comply with Australian unfair contract provisions, just as a prominent digital strategist labelled the global behemoth a “killing machine”.

The written letter to Amazon, from the Australian Small Business and Family Enterprise Ombudsman, aimed to remind the company of obligations under Australian law to treat small business suppliers and partners fairly.

“Some businesses are concerned about the threat of competition while others are excited to embrace the opportunity that Amazon offers,” Ombudsman Kate Carnell said.

“I’m interested to see how Australian small businesses can accelerate sales and broaden their customer base though the Amazon platform.”

Ms Carnell noted that some clauses under Amazon’s American supply contract could be in breach of Australian law if they are to be implemented here – such as reserving the right to refuse service, terminate accounts, terminate usage rights, remove or edit content, or cancel orders at its sole discretion.

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“This may be considered unfair as action can be taken by one party, Amazon, but not the other party, the vendor, to terminate the contract,” she said.

“I’ve requested that Amazon review the terms and conditions in use for standard form contracts in its Australian operations to ensure they comply with the unfair contracts terms legislation.”

Amazon subsequently issued a statement saying it is taking note of unfair contract provisions ahead of its Australian launch.

“We look forward to launching Amazon Marketplace in Australia and providing thousands of small businesses and entrepreneurs with tools and services that help them to reach millions of customers and to expand their businesses both here and abroad. We will, of course, adhere to all local laws in relation to our agreements with Marketplace sellers,” it said.

The move comes as Paul Shetler, who headed up the government’s Digital Transformation Office until November last year and is now ‘expert in residence’ at Sydney fintech hub Stone & Chalk, has been quoted as calling Amazon and fellow digital giant Uber “hyper-competitive, Darwinian killing machines”.

In an article by The Australian Financial Review, Mr Shetler suggests the success of these giants comes down to a kill or be killed mentality, in stark contrast to the collaborative ecosystem being fostered in Australia among start-ups and entrepreneurs.